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RIM's BlackBerry 10 platform wins coveted U.S. security clearance

By Euan Rocha

Reuters

Posted:
11/08/2012 06:33:05 AM PST

Click photo to enlarge

Research In Motion CEO Thorsten Heins discusses features of the Blackberry 10 during his keynote address during the Blackberry Jam Americas in San Jose, California in this September 25, 2012, file photo. Research In Motion Ltd said it won a much-coveted U.S. government security clearance for its yet-to-be-launched platform for BlackBerry 10 devices, due to hit store shelves in the first quarter of 2013, November 8, 2012. REUTERS/Robert Galbraith/Files

TORONTO - Research In Motion said Thursday it won a much-coveted U.S. government security clearance for its yet-to-be-launched platform for BlackBerry 10 devices, due to hit store shelves in the first quarter of 2013.

The company said its BlackBerry 10 platform has received the FIPS 140-2 certification that would allow government agencies to deploy the devices, along with the new enterprise management platform on which they run, as soon as the new smartphones are launched.

Waterloo, Ontario-based RIM said this is the first time BlackBerry products have been FIPS-certified ahead of launch.

"Achieving FIPS certification for an entirely new platform in a very short period of time, and before launch, is quite remarkable," RIM's head of security certifications, David MacFarlane, said in a statement.

The fortunes of RIM, a one-time pioneer in the smartphone industry, have faded in recent years as nimbler rivals such as Apple (AAPL) and Samsung Electronics have come up with faster and snazzier devices.

RIM's fate now depends almost entirely on the long-awaited line of so-called BB 10 devices.

Last month, RIM said it had begun carrier tests on the new line of devices, which the company hopes will help it regain some market share it has ceded to Apple's iPhone and a slew of other devices that run on Google's (GOOG) Android operating system.

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FIPS certification, given by the National Institute of Standards and Technology, is one of the minimum criteria required for products used by U.S. government agencies and regulated industries that collect, store, transfer, share and disseminate sensitive information.

The stamp of approval gives confidence to security-conscious organizations - including some of RIM's top clients like U.S. and Canadian government agencies - that the data stored on smartphones running BlackBerry 10 can be properly secured and encrypted.

Despite winning the coveted security clearance, RIM still faces the tough task of convincing government agencies to stick with RIM and deploy the new BB 10 devices. Some U.S. government agencies have begun to look at other options.

Last month, the U.S. Immigration and Customs Enforcement agency (ICE) said it would end its contract with the BlackBerry maker in favor of Apple's iPhone. The agency said it intends to buy iPhones for more than 17,000 employees.

The Pentagon recently said it will continue to support "large numbers" of BlackBerry phones, even as it moves forward with plans that would allow the U.S. military to begin using Apple's iPhone and other devices.

RIM promises that BlackBerry 10 will be much smoother and faster than its existing line of devices and have the ability to separately manage corporate and personal data on the same device.

The company is attempting to lure developers onto its BB 10 platform. It has been showcasing the new devices to developers at BlackBerry Jam sessions across the globe as the company needs a critical mass of highly sought after apps for its new devices to succeed.

While the devices have been well received by the developer community, financial analysts on Wall Street and Bay Street have mixed views on the reception the smartphones will get from consumers in an ultra-competitive market.

Earlier this week, Pacific Crest analyst James Faucette warned that BlackBerry 10 is likely to be "DOA," or dead on arrival.

Faucette said he expects "the new operating system to be met with a lukewarm response at best," due to the new and unfamiliar user interface and a general reticence on the part of developers to create apps for the platform.

But Paradigm Capital analyst Gabriel Leung is much more optimistic and believes the devices could help potentially mitigate RIM's market share losses in such crucial markets as North America.

"We believe the company has significantly improved its ability to attract developers to build apps for the BB10 ecosystem," said Leung. He has a "buy" rating and a $14 price target on the shares.

RIM closed at $8.24 on the Nasdaq on Wednesday and were up 3 percent at $8.49 in trade before the morning bell on Thursday.